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Decision-Making Strategies and Tools

This document discusses types of decisions, levels of decision making, the decision making process, and business intelligence and decision support systems. It describes unstructured, structured, and semistructured decisions. Senior managers make many unstructured decisions, middle managers make more structured decisions with some unstructured components, and operational managers make more structured decisions. The decision making process has four stages. Business intelligence involves collecting and analyzing business data, while business analytics uses tools to analyze the data. Decision support systems help with operational, middle management, senior management, and group decision making.

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Klaudine Kyle K. Santos
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10 views13 pages

Decision-Making Strategies and Tools

This document discusses types of decisions, levels of decision making, the decision making process, and business intelligence and decision support systems. It describes unstructured, structured, and semistructured decisions. Senior managers make many unstructured decisions, middle managers make more structured decisions with some unstructured components, and operational managers make more structured decisions. The decision making process has four stages. Business intelligence involves collecting and analyzing business data, while business analytics uses tools to analyze the data. Decision support systems help with operational, middle management, senior management, and group decision making.

Uploaded by

Klaudine Kyle K. Santos
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd

Chapter 12

Enhancing Decision Making


Types of decisions

◦ Unstructured: Decision maker must provide judgment,


evaluation, and insight to solve problem

◦ Structured: Repetitive and routine; involve definite procedure


for handling so they do not have to be treated each time as
new

◦ Semistructured: Only part of problem has clear-cut answer


provided by accepted procedure
Types of Decisions by Level
 Senior managers:
◦ Make many unstructured decisions
◦ E.g. Should we enter a new market?

 Middle managers:
◦ Make more structured decisions but these may include unstructured
components
◦ E.g. Why is order fulfillment report showing decline in Minneapolis?

 Operational managers, rank and file employees


◦ Make more structured decisions
◦ E.g. Does customer meet criteria for credit?
Decision Making Process

The decision-making
process is broken
down into four
stages.
Decision Making and Information
 Three main reasons why investments in information
technology do not always produce positive results
1. Information quality (see table 12-3 page 460)
2. Management filters
3. Organizational inertia and politics

 High velocity automated decision making


◦ Automate those structured, routine decision
making
Business Intelligence
 Business intelligence
◦ Infrastructure for collecting, storing, analyzing data produced
by business
◦ Databases, data warehouses, data marts
 Business analytics
◦ Tools and techniques for analyzing data
◦ OLAP, statistics, models, data mining
 Business intelligence vendors
◦ Top five vendors SAP, Oracle, IBM, SAS Institute, and Microsoft
(manage big data)
Business Intelligence Environment
Business Intelligence and Analytics Capabilities

 Main functionalities of BI systems


1. Production reports
2. Parameterized reports
3. Dashboards/scorecards
4. Ad hoc query/search/report creation
5. Drill down
6. Forecasts, scenarios, models

 Pre-defined/prepackaged production reports most


widely used (see table 12-5)
Business Intelligence and Analytics Capabilities (cont)

 Examples of BI applications
◦ Predictive analytics
 Use patterns in data to predict future behavior
 E.g. Credit card companies use predictive analytics to determine
customers at risk for leaving
◦ Data visualization
 Help users see patterns and relationships that would be difficult to
see in text lists (dashboards help)
◦ Geographic information systems (GIS)
 Ties location-related data to maps
Decision Support Systems
(Operational and Middle Mgmt)

 Use mathematical or analytical models


◦ Allow varied types of analysis
 “What-if” analysis
 Sensitivity analysis (see page 472)
 Backward sensitivity analysis
 Multidimensional analysis / OLAP
 E. g. pivot tables (see page 473)
 Use Management Information Systems (MIS)
 Structured and semistructured decisions; data flow
reports; routine production reports; exception reports
Decision Support Systems
(Senior Management)
 Use Executive Support Systems (ESS)
◦ Help executives focus on important performance information;
allow them to drill down to detailed views of data

 Methodology
◦ Balanced scorecard method:
 Measures outcomes on four dimensions:
1. Financial
2. Business process
3. Customer
4. Learning & growth
 Key performance indicators (KPIs) measure each dimension
◦ Business Performance Management (BPM)
Decision Support Systems
(Groups)
 Group Decision Support Systems (GDSS)
◦ Used for tasks involving idea generation, complex
problems, large groups

◦ Example

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